Will the Bank of England increase the flow of quantitative easing finance?
The infamous quantitative easing program continues in the UK having received a £25 billion boost in November. While the minutes from the recent monetary policy committee meeting show that only one member was against increasing the quantitative easing program in November, there is speculation we could see the programme phased out until at least February 2010. However, there is a growing consensus that if the UK economy has not picked up sufficiently by February 2010 we could see a major injection into the quantitative easing program - and it would all start again.
While the Bank of England would appear, at least at the moment, to be attempting to phase out the quantitative easing program there is a concern it will be required in early 2010 if the economy is still sluggish. While the vast majority of economists believe that the UK economy has finally turned the corner, there are some who are concerned about 2010 and feel over optimism in the marketplace could prove to be the downfall of the economy in the months ahead.
Let us be in no doubt, the UK economy has been through the worst recession since the 1930s and companies and individuals will continue to pay the price for many months to come. Those who believe we are back to the boom and bust days may well need to think again.
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